UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November, 2014

 

Comission File Number 001-32535

 

Bancolombia S.A.

(Translation of registrant’s name into English)

 

Cra. 48 # 26-85
Medellín, Colombia
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ                    Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):___

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(2):___

 

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o                    No þ

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    .

  

 
 

 

   
  3Q14

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF COP 416 BILLION FOR THE THIRD QUARTER OF 2014 (COP 432 PER SHARE - USD 0.85 PER ADR). NET INCOME REPRESENTS AN INCREASE OF 28% COMPARED TO THE SAME QUARTER OF LAST YEAR. THE CUMULATIVE NET INCOME AS OF SEPTEMBER 2014 WAS 1,391 BILLION AND INCREASED 36% COMPARED WITH THE CUMMULATIVE NET INCOME AS OF SEPTEMBER 2013

 

·The bank showed a sustained growth in the loan portfolio during 3Q14. Bancolombia’s loan portfolio grew 3.3% during the quarter and 23.8% during the last twelve months. The annual growth was explained, 16.4% by the contribution of Banistmo (formerly HSBC Panama) and 7.4% by the organic growth of the existing operation prior to this acquisition.

 

·The balance sheet remains strong. Loan loss reserves represented 4.6% of total gross loans and 148% of 30-day past due loans at the end of 3Q14 or 268% of 90-day past due loans. The capital adequacy ratio ended the quarter at 13.9% with a Tier 1 of 8.5%. These ratios indicate that Bancolombia has enough reserves and capital to maintain its operation and develop its business plan.

 

·Past due loans as a percentage of total loans remained stable in 3Q14. Past due loans as a percentage of total gross loans were 3.1% on a 30-day basis and 1.7% on a 90-day basis. Net provision charges for past due loans and foreclosed assets totaled COP 384 billion, which represents 1.61% of gross loans when annualized.

 

·Fees increased 4.3% during the quarter and 23% during the last 12 months. Net income from fees grew mainly driven by a greater number of credit and debit cards and by the distribution of insurance products through the bank’s network.

 

·Total cumulative operating income increased faster than the cumulative operating expenses, and efficiency continues its trend of improvement. During the first 9 months of the year, operating income increased 24.9% and operating expenses increased 9.3%, indicating an improvement in the efficiency ratio. Operating expenses represented 3.9% of total assets, down from 4.2% one year ago.

 

·The bank maintained its liquidity position and the funding cost remained at low levels. The annualized average weighted cost of deposits was 2.3% in 3Q14, compared with the 2.2% of 2Q14 and lower than the 2.7% for 3Q13. Deposits increased 2.9% during the quarter and 19.7% compared to 3Q13, and the ratio of net loans to deposits ended at 102%. This annual growth in deposits was explained, 16.3% by the contribution of Banistmo and 3.4% by the organic growth of the existing operation prior to this acquisition.

 

November 10, 2014. Medellín, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the third quarter of 2014.

 

For the quarter ended on September 30, 2014 (“3Q14”), Bancolombia reported consolidated net income of COP 416 billion, or COP 432 per share - USD 0.85 per ADR. Net income represents a decrease of 11% as compared to the results for the quarter ended on June 30, 2014 (“2Q14”) and an increase of 28% as compared to the results for the quarter ended on September 30, 2013 (“3Q13”).

 

Bancolombia ended 3Q14 with COP 135,508 billion in assets, 4.9% greater than those at the end of 2Q14 and 19.2% greater than those at the end of 3Q13. At the same time, liabilities totaled COP 119,542 billion, increasing 5% as compared to the figure presented in 2Q14 and 17.6% as compared to 3Q131.

 

 

1This report corresponds to the consolidated financial statements of BANCOLOMBIA S.A. and its affiliates (“BANCOLOMBIA” or “The Bank”) of which it owns, directly or indirectly more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of Superintendencia Financiera de Colombia, collectively COL GAAP. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. There have been no changes to the Bank's principal accounting policies in the quarter ended September 30, 2014. The statements of income for the quarter ended September 30, 2014 are not necessarily indicative of the results for any other future interim period. For more information, please refer to the Bank's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties; consequently, there are or will be factors, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptances of new products or services by our targeted customers, changes in business strategy and various others factors, that could cause actual results to differ materially from those indicated in such statements. We do not intend, and do not assume any obligation, to update these forward-looking statements. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. Any reference to BANCOLOMBIA means the Bank together with its affiliates, unless otherwise specified.

Representative Market Rate October 1, 2014 $2,022 = US$ 1

 

1
 

 

   
  3Q14

 

BANCOLOMBIA: Summary of consolidated financial quarterly results2

CONSOLIDATED BALANCE SHEET            
AND INCOME STATEMENT  Quarter   Growth 
(COP millions)  3Q13   2Q14   3Q14   3Q14/2Q14   3Q14/3Q13 
ASSETS                         
Loans and financial leases, net   74,727,617    89,538,026    92,507,172    3.32%   23.79%
Investment securities, net   14,523,348    11,836,684    13,185,442    11.39%   -9.21%
Other assets   24,417,371    27,804,029    29,815,456    7.23%   22.11%
Total assets   113,668,336    129,178,739    135,508,070    4.90%   19.21%
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Deposits   72,013,506    83,766,009    86,218,658    2.93%   19.73%
Non-interest bearing   9,217,936    12,805,473    13,089,813    2.22%   42.00%
Interest bearing   62,795,570    70,960,536    73,128,845    3.06%   16.46%
Other liabilities   29,655,143    30,053,995    33,323,166    10.88%   12.37%
Total liabilities   101,668,649    113,820,004    119,541,824    5.03%   17.58%
Shareholders' equity   11,999,687    15,358,735    15,966,246    3.96%   33.06%
Total liabilities and shareholders' equity   113,668,336    129,178,739    135,508,070    4.90%   19.21%
                          
Interest income   1,979,128    2,230,096    2,298,607    3.07%   16.14%
Interest expense   758,928    750,062    814,948    8.65%   7.38%
Net interest income   1,220,200    1,480,034    1,483,659    0.24%   21.59%
Net provisions   (289,233)   (335,210)   (384,219)   14.62%   32.84%
Fees and income from service, net   460,540    541,679    564,911    4.29%   22.66%
Other operating income   217,172    259,965    279,302    7.44%   28.61%
Total operating expense   (1,143,502)   (1,250,997)   (1,240,468)   -0.84%   8.48%
Goodwill amortization   (12,745)   (50,831)   (51,519)   1.35%   304.23%
Non-operating income, net   (4,687)   3,809    (75,439)   -2080.55%   1509.54%
Income tax expense   (123,820)   (181,165)   (160,711)   -11.29%   29.79%
Net income   323,925    467,284    415,516    -11.08%   28.28%

 

PRINCIPAL RATIOS  Quarter   As of 
   3Q13   2Q14   3Q14   Sep-13   Sep-14 
PROFITABILITY                         
Net interest margin (1)   5.27%   5.64%   5.58%   5.55%   5.59%
Return on average total assets (2)   1.16%   1.44%   1.26%   1.30%   1.42%
Return on average shareholders´ equity (3)   10.95%   12.34%   10.62%   11.66%   12.70%
EFFICIENCY                         
Operating expenses to net operating income   60.92%   57.06%   55.50%   60.24%   55.61%
Operating expenses to average total assets   4.15%   4.02%   3.92%   4.29%   3.89%
CAPITAL ADEQUACY                         
Shareholders' equity to total assets   10.56%   11.89%   11.78%          
Technical capital to risk weighted assets   15.30%   13.48%   13.94%          
KEY FINANCIAL HIGHLIGHTS                         
Net income per ADS (USD)   0.80    1.03    0.85           
Net income per share $COP   380.27    485.83    432.01           
P/BV ADS (4)   1.95    1.70    1.73           
P/BV Local (5) (6)   1.91    1.66    1.67           
P/E  (7)   17.83    13.81    16.29           
ADR price  (8)   57.54    57.80    56.72           
Common share price  (8)   26,900    26,540    27,680           
Shares outstanding  (9)   851,827,000    961,827,000    961,827,000           
USD exchange rate (quarter end)   1,908.29    1,881.19    2,022.00           

 

 

(1) Defined as net interest income divided by monthly average interest-earning assets. (2) Net income divided by monthly average assets. (3) Net income divided by monthly average shareholders' equity. (4) Defined as ADS price divided by ADS book value. (5) Defined as share price divided by share book value. (6) Share prices on the Colombian Stock Exchange; (7) Defined as market capitalization divided by annualized quarter results. (8) Prices at the end of the respective quarter. (9) Common and preferred.

 

2
 

 

   
  3Q14

 

1.BALANCE SHEET

 

1.1.Assets

 

As of September 30, 2014, Bancolombia’s assets totaled COP 135,508 billion, which represents an increase of 4.9% compared to 2Q14 and of 19.2% compared to 3Q13. The annual growth was explained, 14.8% by the contribution of Banistmo and, 4.4% by the organic growth of the existing operation prior to this acquisition.

 

The increase in assets in the quarter was explained by the 7.5% depreciation of the COP versus the USD. The annual growth of assets was mainly explained by the consolidation of Banistmo’s assets in 4Q13 and the organic growth of loans and finance leases, which represented 68.3% of the assets at the end of 3Q14.

 

1.2.Loan Portfolio

 

The following table shows the composition of Bancolombia’s investments and loans by type and currency:

 

(COP Million)  Amounts in COP   Amounts in USD converted to COP   Amounts in USD (thousands)   Total 
(1 USD = 2022 COP)      3Q14/2Q14   3Q14/3Q13       3Q14/2Q14   3Q14/3Q13       3Q14/2Q14   3Q14/3Q13       3Q14/2Q14   3Q14/3Q13 
Net investment securities   9,565,684    22.75%   -2.00%   3,619,758    -10.49%   -24.00%   1,790,187    -16.73%   -27.57%   13,185,442    11.39%   -9.21%
Gross Loans   66,061,473    0.75%   8.73%   30,911,005    9.52%   75.06%   15,287,342    1.89%   66.82%   96,972,478    3.39%   23.66%
Commercial loans   36,676,968    0.03%   7.71%   20,497,237    9.58%   51.71%   10,137,110    1.95%   44.57%   57,174,205    3.25%   20.21%
Consumer loans   12,284,157    -0.01%   4.39%   4,879,428    9.13%   107.86%   2,413,169    1.53%   98.07%   17,163,585    2.43%   21.60%
Small  business loans   465,353    5.36%   27.22%   129,690    5.27%   368.67%   64,139    -2.06%   346.61%   595,043    5.34%   51.23%
Mortgage loans   7,232,152    2.84%   15.63%   4,190,416    10.20%   399.53%   2,072,411    2.52%   376.02%   11,422,568    5.42%   61.03%
Finance lease   9,402,843    2.85%   13.03%   1,214,234    8.29%   30.24%   600,511    0.75%   24.11%   10,617,077    3.4%   14.8%
Allowance for loan losses   (3,727,545)   3.64%   11.15%   (737,761)   12.08%   119.82%   (364,867)   4.27%   109.48%   (4,465,306)   4.94%   21.03%
Net total loans and fin. leases   62,333,928    0.58%   8.58%   30,173,244    9.46%   74.20%   14,922,475    1.84%   66.00%   92,507,172    3.32%   23.79%
Operating leases, net   3,304,732    6.40%   20.85%   99,408    -0.36%   8.45%   49,163    -7.30%   3.34%   3,404,140    6.19%   20.45%
Total assets   84,958,549    -5.96%   1.88%   50,549,521    30.17%   66.94%   24,999,763    21.10%   59.08%   135,508,070    4.90%   19.21%
Total deposits   58,986,517    -0.71%   1.19%   27,232,141    11.80%   98.44%   13,467,923    4.02%   89.10%   86,218,658    2.93%   19.73%
Total liabilities   70,461,924    -7.62%   -2.33%   49,079,900    30.73%   66.23%   24,272,948    21.63%   58.41%   119,541,824    5.03%   17.58%

 

The most relevant aspects regarding the evolution of the loan portfolio during 3Q14 were:

 

·          The growth of commercial, mortgage loans and financial leases in Colombia during 3Q14 indicate a moderate credit demand.

 

·          Net loans in USD correspond to loans originated in Colombia (USD 3,911 million, 26%), El Salvador (USD 2,753 million, 18%), Panamá (USD 7,806 million, 52%), and other countries (USD 453 million, 3%). USD denominated loans represented 32% of total loans as of 3Q14.

 

·          COP depreciated 7.5% versus USD during 3Q14 and 6.0% in the last 12 months.

 

·          Mortgage loans denominated in COP presented a dynamic performance, growing 15.6% year on year. The dynamism of mortgage lending in Colombia is explained by the lower long-term interest rates, as well as by the Colombian government’s interest rate subsidy programs. On the other hand, the mortgage balance denominated in USD from our operation in El Salvador and Panama represented 37% of the mortgage loans at the end of 3Q14.

 

·          Financial leases, of which 89% are denominated in COP, increased 3.4% during the quarter and 14.8% as compared to 3Q13. Operating leases, net of depreciation, increased 6.2% during 3Q14 and 20.5% in the last 12 months. These two products are mainly used by enterprises in order to finance equipment, commercial real estate and commercial vehicles.

 

3
 

 

   
  3Q14

 

When analyzing the loan portfolio according to the customer categories established by Bancolombia in order to manage its commercial strategy (see table below), it becomes clear that commercial loans led the growth during 3Q14, as they increased 3.4% with respect to 2Q14. The growth is explained by the credit demand for business investment. This is the segment that contributes the most to the nominal growth of the total loan book. Consumer and SMEs loans increased by 2.6% when compared with 2Q14, which indicates a sustained credit demand compared with the growth in previous quarters.

 

Total reserves (allowances in the balance sheet) for loan losses increased by 4.9% during 3Q14 and totaled COP 4,465 billion, or 4.6% of gross loans at the end of the quarter. For further explanation regarding coverage of the loan portfolio and credit quality trends, see section “2.4. Asset Quality, Provision Charges and Balance Sheet Strength”.

 

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO      As of       Growth   % of Total   % of 
(COP million)  Sep-13   Jun-14   Sep-14   3Q14/2Q14   3Q14/3Q13   loans   Category 
CORPORATE                                   
Working capital loans   34,072,869    36,092,150    36,701,603    1.69%   7.72%   37.85%   81.40%
Funded by domestic development banks   417,679    533,495    669,552    25.50%   60.30%   0.69%   1.48%
Trade Financing   2,076,044    6,735,616    7,510,348    11.50%   261.76%   7.74%   16.66%
Overdrafts   239,602    208,525    158,869    -23.81%   -33.69%   0.16%   0.35%
Credit Cards   42,252    47,239    50,156    6.17%   18.71%   0.05%   0.11%
TOTAL CORPORATE   36,848,446    43,617,025    45,090,528    3.38%   22.37%   46.50%   100.00%
RETAIL AND SMEs                                   
Working capital loans   9,534,830    10,415,341    11,095,140    6.53%   16.36%   11.44%   37.18%
Personal loans   7,850,183    9,470,435    9,818,860    3.68%   25.08%   10.13%   32.90%
Loans funded by   domestic development banks   1,086,850    1,238,278    839,804    -32.18%   -22.73%   0.87%   2.81%
Credit Cards   4,041,083    4,765,605    4,849,751    1.77%   20.01%   5.00%   16.25%
Overdrafts   315,850    330,561    330,077    -0.15%   4.50%   0.34%   1.11%
Automobile loans   2,284,997    2,621,399    2,653,184    1.21%   16.11%   2.74%   8.89%
Trade Financing   110,153    235,204    255,488    8.62%   131.94%   0.26%   0.86%
TOTAL RETAIL AND SMEs   25,223,946    29,076,823    29,842,304    2.63%   18.31%   30.77%   100.00%
MORTGAGE   7,093,610    10,835,105    11,422,568    5.42%   61.03%   11.78%   100.00%
FINANCIAL LEASES   9,250,968    10,263,998    10,617,078    3.44%   14.77%   10.95%   100.00%
Total loans and financial leases   78,416,970    93,792,951    96,972,478    3.39%   23.66%   100.00%   100.00%
Allowance for loan losses   (3,689,353)   (4,254,925)   (4,465,306)   4.94%   21.03%          
Total loans and financial leases, net   74,727,617    89,538,026    92,507,172    3.32%   23.79%          

 

1.3.Investment Portfolio

 

As of September 30, 2014, Bancolombia’s net investment portfolio totaled COP 13,185 billion, 11.4% higher than that reported in 2Q14 and 9.2% lower when compared to that reported in 3Q13. This annual decrease is the result of the bank's strategy to reduce its securities portfolio, which consisted primarily of debt securities, which represented 86.1% of Bancolombia’s total investments and 8.4% of assets at the end of 3Q14. Investments denominated in USD totaled USD 1,790 million and represented 27% of the investment portfolio.

 

Additionally, the Bank had COP 720 billion in net mortgage backed securities, which represented 5.5% of the investment portfolio and give a tax benefit to the bank.

 

At the end of 3Q14, the investments in debt securities had a duration of 20.7 months and a yield to maturity of 4.97%.

 

4
 

 

   
  3Q14

 

1.4.Goodwill

 

As of 3Q14, Bancolombia’s goodwill totaled COP 3,604 billion, increasing 5.9% compared to the amount reported in 2Q14 and 528.3% compared to 3Q13. This annual variation is explained by the acquisition of Banistmo which generated goodwill of approximately 1.500 million USD, and the quarterly increase is explained by the depreciation of the peso against the dollar during the quarter. Under Colombian GAAP, goodwill is amortized within a maximum period of 20 years.

 

1.5.Funding

 

As of September 30, 2014, Bancolombia’s liabilities totaled COP 119,542 billion, increasing 5.0% compared to 2Q14 and 17.6% compared to 3Q13. The annual growth was explained, 14.2% by the contribution of Banistmo and 3.4% by the organic growth of the existing operation prior to this acquisition.

 

Deposits totaled COP 86,219 billion (or 72.1% of liabilities) at the end of 3Q14, increasing 2.9% during the quarter and 19.7% over the last 12 months. The net loans to deposits ratio (including borrowings from domestic development banks) was 102% at the end of 3Q14, increasing compared to the 101% reported in 2Q14, and the 98% reported in 3Q13.

 

Bancolombia´s funding strategy during the quarter was to reduce the most expensive deposits and liabilities while maintaining the liquidity position. This strategy allowed the bank to keep at low levels the cost on deposits during the quarter. The ultimate goal is to defend the net interest margin.

 

Funding mix  3Q13   2Q14   3Q14 
COP Million                    
Checking accounts   11,664,539    12%   15,547,510    15%   15,689,961    14%
Saving accounts   29,406,525    30%   33,686,393    31%   34,319,854    30%
Time deposits   30,227,429    31%   33,537,537    30%   35,322,572    31%
Other deposits   715,013    1%   994,569    1%   886,271    1%
Long term debt   12,331,172    13%   11,826,291    11%   12,555,127    11%
Loans with banks   12,509,301    13%   11,583,660    12%   14,527,812    13%
Total Funds   96,853,979    100%   107,175,960    100%   113,301,597    100%

 

At the end of 3Q14, Bancolombia had outstanding bonds for USD 3,464 million in international markets and for COP 5,552 billion in local markets. The maturities of these bonds range from 2 to 20 years.

 

5
 

 

   
  3Q14

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 3Q14 was COP 15,966 billion, increasing 33.1% or COP 3,967 billion, with respect to the COP 12,000 billion reported at the end of 3Q13 as a result of the proceeds of the issuance of 110 million shares in March 2014, which totaled COP 2,656 billion, and the appropriation of 2013 earnings.

 

Bancolombia’s capital adequacy ratio was 13.94%, 46 basis points above the 13.48% for 2Q14 and 136 basis points below the 15.30% at the end of 3Q13. The annual decrease in this ratio was due to the incorporation of Banistmo’s risk weighted assets and the goodwill deduction generated in this acquisition.

 

Bancolombia’s capital adequacy ratio was 494 basis points above the minimum 9% required by Colombia’s regulator, while the basic capital ratio (Tier 1) to risk weighted assets was 8.47%, 397 basis points above the regulatory minimum of 4.5% . The tangible capital ratio, defined as shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 9.0% at the end of 3Q14.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS
Consolidated (COP millions)  3Q13   %   2Q14   %   3Q14   % 
Basic capital (Tier I)   9,522,134    10.12%   9,807,038    8.96%   9,689,180    8.47%
Additional capital (Tier II)   4,873,451    5.18%   4,946,263    4.52%   6,253,430    5.47%
Technical capital (1)   14,395,585         14,753,301         15,942,611      
Risk weighted assets included market risk   94,070,332         109,416,678         114,368,669      
CAPITAL ADEQUACY (2)   15.30%        13.48%        13.94%     

 

(1) Technical capital is the sum of basic and additional capital.

(2) Capital adequacy is technical capital divided by risk weighted assets.

 

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  3Q14

 

2.INCOME STATEMENT

 

Net income totaled COP 416 billion in 3Q14, or COP 432 per share - USD 0.85 per ADR. This net income represents a decrease of 11.1% compared to 2Q14 and an increase of 28.3% compared to 3Q13. Bancolombia’s annualized ROE was 12.7% for 3Q14.

 

2.1.Net Interest Income

 

Net interest income totaled COP 1,484 billion in 3Q14, 0.2% higher than that reported in 2Q14, and 21.6% higher than the figure for 3Q13. The performance of this line was driven by higher loan volumes.

 

During 3Q14, the investment portfolio generated COP 79 billion, product of the good performance of the Colombian government debt securities.

 

Net Interest Margin

 

The annualized net interest margin remained stable in 3Q14 at 5.6%.

 

The annualized net interest margin for investments was 0.0%, lower than the 0.2% of 2Q14 and the annualized net interest margin of the loan portfolio, financial leases, overnight funds and interbank loans was 6.2%, lower than the 6.3% of 2Q14. The lower NIMs were explained by the increase in the funding cost due to the premium paid in the advanced redemption of the USD denominated 2016 senior notes.

 

Annualized Interest                                    
Margin  3Q12   4Q12   1Q13   2Q13   3Q13   4Q13   1Q14   2Q14   3Q14 
Loans' Interest margin   7.1%   6.9%   6.6%   6.4%   6.2%   6.0%   6.1%   6.3%   6.2%
Debt investments' margin   4.0%   2.9%   8.0%   -5.1%   -0.4%   0.1%   1.8%   0.2%   0.0%
Net interest margin   6.6%   6.3%   6.8%   4.7%   5.3%   5.3%   5.5%   5.6%   5.6%

 

The funding cost increased during 3Q14 in line with the increase in the central bank interest rate; however, it remains low due to the liquidity and the management of the liabilities structure, which reduced the most expensive funding sources. Savings and checking accounts slightly decreased their share during the quarter, and the annualized average weighted cost of deposits was 2.3% in 3Q14, increasing compared to the 2.2% for 2Q14 and decreasing compared to the 2.7% for 3Q13.

 

Average weighted            
funding cost  3Q13   2Q14   3Q14 
Checking accounts   0.24%   0.17%   0.18%
Time deposits   4.42%   4.08%   4.22%
Saving accounts   2.03%   1.38%   1.45%
Total deposits   2.69%   2.20%   2.32%
Long term debt   6.12%   6.22%   6.35%
Loans with banks   3.27%   3.27%   3.91%
Total funding cost   3.21%   2.78%   2.96%

 

7
 

 

   
  3Q14

 

2.2.Fees and Income from Services

 

During 3Q14, net fees and income from services totaled COP 565 billion, increasing 4.3% with respect to 2Q14 and 22.7% with respect to 3Q13. Fees from credit and debit cards increased 0.1% compared to 2Q14 due to a slight increase in the volume of transactions. Fees from banking services increased 7.3% compared to 2Q14 and 48.5% compared to 3Q13; this line includes fees from insurance distribution throughout the distribution networks in Colombia and in El Salvador. Fees from asset management and trust services increased 2.1% in 3Q14 compared with the previous quarter.

 

The following table summarizes Bancolombia’s participation in the credit card business in Colombia:

 

ACCUMULATED CREDIT CARD BILLING  %   2014 
(COP millions)  Aug-13   Aug-14   Growth   Market Share 
Bancolombia VISA   1,830,276    1,990,554    8.76%   7.44%
Bancolombia Mastercard   2,240,251    2,465,070    10.04%   9.21%
Bancolombia American Express   2,603,837    2,674,598    2.72%   10.00%
Total Bancolombia   6,674,364    7,130,222    6.83%   26.65%
Colombian Credit Card Market   24,362,156    26,753,295    9.81%     

 

CREDIT CARD MARKET SHARE  %   2014 
(Outstanding credit cards)  Aug-13   Aug-14   Growth   Market Share 
Bancolombia VISA   446,145    477,296    6.98%   4.92%
Bancolombia Mastercard   555,321    622,223    12.05%   6.42%
Bancolombia American Express   670,632    698,338    4.13%   7.20%
Total Bancolombia   1,672,098    1,797,857    7.52%   18.54%
Colombian Credit Card Market   8,829,434    9,694,995    9.80%     
Source: Superintendencia Financiera de Colombia          

 

2.3.Other Operating Income

 

Total other operating income was COP 279 billion in 3Q14, 7.4% higher than that of 2Q14, and 28.6% higher than in 3Q13. Income from foreign exchange gains and derivatives denominated in foreign currencies increased in the quarter due to the net effect of the active and passive positions the bank had in foreign currency.

 

During 3Q14 the bank received COP 5.1 billion in dividends from companies in which Bancolombia and its subsidiaries have interests, especially from Concesiones CCFC LTDA. (COP 3.2 billion) and Reintegra S.A. (COP 1.9 billion).

 

Revenues aggregated in the communication, rent and others line totaled COP 150 billion in 3Q14, which is 3.6% higher as compared to 2Q14 and 21.6% higher as compared to those in 3Q13. This line includes revenues from commercial discounts and operating leases payments, which have increased as this product grows.

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

Past due loans (those that are overdue for more than 30 days) totaled COP 3.018 billion at the end of 3Q14and represented 3.1% of total gross loans for 3Q14, remaining stable compared to the 3.1% reported in 2Q14 and increasing compared to the 2.7% reported in 3Q13. Charge-offs totaled COP 256 billion in 3Q14.

 

The coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 148% at the end of 3Q14, remaining stable with respect to the 148% of 2Q14 and decreasing with respect to the 175% of 3Q13. Likewise, the coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 114% at the end of 3Q14, decreasing with respect to the 116% reported in 2Q14 and the 120% reported in 3Q13.

 

8
 

 

   
  3Q14

 

The deterioration of the loan portfolio (new past due loans including charge-offs) was COP 404 billion in 3Q14, which represented 0.4% of the loan portfolio at the beginning of the quarter, increasing with respect to the COP 173 billion in 2Q14.

 

Provision charges (net of recoveries) totaled COP 384 billion in 3Q14. Provisions as a percentage of the average gross loans were 1.61% for 3Q14.

 

Bancolombia maintains a strong balance sheet supported on an adequate level of loan loss reserves. Allowances for loan losses totaled COP 4,465 billion, or 4.60% of total loans at the end of 3Q14. This proportion increased with respect to the 4.54% presented at the end of 2Q14, and decreased with respect to the 4.70% for 3Q13.

 

The following tables present key metrics related to asset quality:

 

ASSET QUALITY      As of       Growth 
( COP millions)  Sep-13   Jun-14   Sep-14   3Q14/2Q14   3Q14/3Q13 
Total performing past due loans (1)   692,137    1,087,239    1,091,904    0.43%   57.76%
Total non-performing past due loans   1,411,940    1,783,152    1,925,794    8.00%   36.39%
Total past due loans   2,104,077    2,870,391    3,017,698    5.13%   43.42%
Allowance for loans interest losses   3,689,353    4,254,925    4,465,306    4.94%   21.03%
Past due loans to total loans   2.68%   3.06%   3.11%          
Non-performing loans as a percentage of total loans   1.80%   1.90%   1.99%          
“C”, “D” and “E” loans as a percentage of total loans   3.91%   3.92%   4.03%          
Allowances to past due loans (2)   175.34%   148.24%   147.97%          
Allowance for loan  losses as a percentage of “C”, “D” and “E” loans (2)    120.33%   115.68%   114.22%          
Allowance for loan losses as a percentage of non-performing loans (2)   261.30%   238.62%   231.87%          
Allowance for loan losses as a percentage of total loans   4.70%   4.54%   4.60%          
Percentage of performing loans to total loans   98.20%   98.10%   98.01%          

 

(1)         "Performing" past due loans are loans upon which Bancolombia continues to recognize income although interest in respect of such loans has not been received. Mortgage loans cease to accumulate interest on the statement of operations when they are more than 60 days past due. For all other loans and financial leasing operations of any type, interest is no longer accumulated after they are more than 30 days past due.

 

(2)         Under Colombian Bank regulations, a loan is past due when it is at least 31 days past the actual due date.

 

                
PDL Per Category (30 days)  % Of loan Portfolio   3Q13   2Q14   3Q14 
Commercial loans   58.96%   1.55%   1.79%   1.96%
Consumer loans   17.70%   4.80%   5.11%   4.92%
Microcredit   0.61%   10.30%   9.15%   8.52%
Mortgage loans   11.78%   6.13%   6.81%   6.12%
Finance lease   10.95%   2.31%   2.26%   2.87%
PDL TOTAL   100.00%   2.68%   3.06%   3.11%

 

                
PDL Per Category (90 days)  % Of loan Portfolio   3Q13   2Q14   3Q14 
Commercial loans   58.96%   1.09%   1.20%   1.37%
Consumer loans   17.70%   2.42%   2.42%   2.44%
Microcredit   0.61%   7.27%   5.86%   5.82%
Mortgage loans   11.78%   2.81%   2.43%   2.39%
Finance lease   10.95%   1.33%   1.30%   1.43%
TOTAL LOAN PORTFOLIO   100.00%   1.54%   1.60%   1.72%

 

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  3Q14

 

LOANS AND FINANCIAL LEASES CLASSIFICATION  3Q13   2Q14   3Q14 
(COP millions)                    
¨A¨ Normal   73,087,284    93.20%   86,908,547    92.66%   89,670,299    92.47%
¨B¨ Subnormal   2,263,565    2.89%   3,206,314    3.42%   3,392,671    3.50%
¨C¨ Deficient   1,292,074    1.65%   1,520,878    1.62%   1,551,640    1.59%
¨D¨ Doubtful recovery   1,045,062    1.33%   1,267,447    1.35%   1,392,325    1.44%
¨E¨ Unrecoverable   728,985    0.93%   889,765    0.95%   965,543    1.00%
Total   78,416,970    100.00%   93,792,951    100.00%   96,972,478    100.00%
    62249473    1    72188142    1    75933288    100.01%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases   3.91%        3.92%        4.03%     

 

2.5.Operating Expenses

 

During 3Q14, operating expenses totaled COP 1,240 billion, decreasing 0.8% with respect to 2Q14 and increasing 8.5% with respect to 3Q13.

 

Personnel expenses (salaries, bonus plan payments and compensation) totaled COP 451 billion in 3Q14, decreasing 2.4% as compared to 2Q14 and increasing 12.0% as compared to 3Q13. This increase is explained by higher salaries expenses due to the higher number of employees as well as by the 2014 wage increases. In addition, in 3Q14 are reflected 3 months of Banistmo’s expenses that did not exist a year ago prior to the acquisition of the bank.

 

During 3Q14, administrative expenses totaled COP 618 billion, increasing 0.4% as compared to 2Q14 and 7.0% as compared to 3Q13.

 

Depreciation expenses totaled COP 139 billion in 3Q14, increasing 4.5% as compared to 2Q14 and 24.9% as compared to 3Q13. The increase in this type of expense is explained by the growth of operating leases from Leasing Bancolombia whose assets given on lease are depreciated.

 

At the end of 3Q14, Bancolombia had 29,773 employees, 1,071 branches and 4,404 ATMs.

 

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  3Q14

 

3.BANCOLOMBIA Company Description (NYSE: CIB)

 

GRUPO BANCOLOMBIA is a full service financial conglomerate incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 9 million customers. GRUPO BANCOLOMBIA delivers its products and services via its regional network comprised of: Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore and local (Banistmo S.A.) banking subsidiaries in Panama, Cayman and Puerto Rico. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, among others.

 

Contact Information

 

Bancolombia’s Investor Relations

Phone: (574) 4041837 / (574) 4041838

E-mail: investorrelations@bancolombia.com.co

Alejandro Mejia (IR Manager) / Simon Botero (Analyst)

Website: http://www.grupobancolombia.com/investorRelations/

 

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  3Q14

 

BALANCE SHEET                        
(COP million)  Sep-13   Jun-14   Sep-14   Last
Quarter		   Annual   % of
Assets		   % of
Liabilities		 
ASSETS                                   
Cash and due from banks   8,439,492    8,437,163    10,000,245    18.53%   18.49%   7.38%     
Overnight funds and interbank loans   4,267,357    2,665,916    2,776,563    4.15%   -34.93%   2.05%     
Total cash and equivalents   12,706,849    11,103,079    12,776,808    15.07%   0.55%   9.43%     
Debt securities   13,288,857    10,122,306    11,362,062    12.25%   -14.50%   8.38%     
Trading   8,114,463    4,575,682    6,753,862    47.60%   -16.77%   4.98%     
Available for Sale   1,555,171    1,859,427    1,742,253    -6.30%   12.03%   1.29%     
Held to Maturity   3,619,223    3,687,197    2,865,947    -22.27%   -20.81%   2.11%     
Equity securities   1,241,511    1,723,340    1,832,948    6.36%   47.64%   1.35%     
Trading   412,532    380,473    412,407    8.39%   -0.03%   0.30%     
Available for Sale   828,979    1,342,867    1,420,541    5.78%   71.36%   1.05%     
Allowance for impairment   -7,020    -8,962    -9,568    6.76%   36.30%   -0.01%     
Net investment securities   14,523,348    11,836,684    13,185,442    11.39%   -9.21%   9.73%     
Commercial loans   47,563,831    55,372,254    57,174,205    3.25%   20.21%   42.19%     
Consumer loans   14,115,106    16,756,732    17,163,585    2.43%   21.60%   12.67%     
Small business loans   393,456    564,862    595,043    5.34%   51.23%   0.44%     
Mortgage loans   7,093,609    10,835,105    11,422,568    5.42%   61.03%   8.43%     
Financial leases   9,250,968    10,263,998    10,617,077    3.44%   14.77%   7.84%     
Allowance for loan and financial lease losses   -3,689,353    -4,254,925    -4,465,306    4.94%   21.03%   -3.30%     
Net total loans and financial leases   74,727,617    89,538,026    92,507,172    3.32%   23.79%   68.27%     
Accrued interest receivable on loans and financial leases   622,991    700,926    703,538    0.37%   12.93%   0.52%     
Allowance for accrued interest losses   -61,803    -67,905    -67,674    -0.34%   9.50%   -0.05%     
Net total interest accrued   561,188    633,021    635,864    0.45%   13.31%   0.47%     
Customers' acceptances and derivatives   598,237    639,887    686,176    7.23%   14.70%   0.51%     
Accounts receivable, net   1,538,437    1,844,917    1,635,779    -11.34%   6.33%   1.21%     
Premises and equipment, net   1,569,253    2,131,447    2,199,503    3.19%   40.16%   1.62%     
Foreclosed assets, net   97,581    79,581    88,232    10.87%   -9.58%   0.07%     
Prepaid expenses and deferred charges, net   547,638    573,348    557,255    -2.81%   1.76%   0.41%     
Goodwill   573,608    3,404,483    3,603,940    5.86%   528.29%   2.66%     
Premises and equipment under operating leases, net   2,826,134    3,205,819    3,404,140    6.19%   20.45%   2.51%     
Other assets   2,419,752    2,691,243    2,684,675    -0.24%   10.95%   1.98%     
Reappraisal of assets   978,694    1,497,204    1,543,084    3.06%   57.67%   1.14%     
Total assets   113,668,336    129,178,739    135,508,070    4.90%   19.21%   100.00%     
LIABILITIES AND SHAREHOLDERS' EQUITY                                   
LIABILITIES                                   
DEPOSITS                                   
Non-interest bearing   9,217,936    12,805,473    13,089,813    2.22%   42.00%   9.62%   10.91%
Checking accounts   8,502,923    11,810,904    12,203,542    3.32%   43.52%   8.97%   10.17%
Other   715,013    994,569    886,271    -10.89%   23.95%   0.65%   0.74%
Interest bearing   62,795,570    70,960,536    73,128,845    3.06%   16.46%   54.00%   61.22%
Checking accounts   3,161,616    3,736,606    3,486,419    -6.70%   10.27%   2.61%   2.96%
Time deposits   30,227,429    33,537,537    35,322,572    5.32%   16.86%   26.07%   29.55%
Savings deposits   29,406,525    33,686,393    34,319,854    1.88%   16.71%   25.33%   28.71%
Total deposits   72,013,506    83,766,009    86,218,658    2.93%   19.73%   63.63%   72.12%
Overnight funds and interbank borrowings   2,185,843    571,022    2,998,783    425.16%   37.19%   2.21%   2.51%
Bank acceptances outstanding and derivatives   455,051    477,339    581,514    21.82%   27.79%   0.43%   0.49%
Other interbank borrowings   6,338,644    6,499,453    7,390,486    13.71%   16.59%   5.45%   6.18%
Borrowings from development and other domestic banks   3,984,814    4,513,185    4,138,543    -8.30%   3.86%   3.05%   3.46%
Accounts payable   1,882,304    2,994,374    2,312,864    -22.76%   22.87%   1.71%   1.93%
Accrued interest payable   561,695    562,039    548,119    -2.48%   -2.42%   0.40%   0.46%
Other liabilities   780,879    1,220,059    1,176,962    -3.53%   50.72%   0.87%   0.98%
Long-term debt   12,331,172    11,826,291    12,555,127    6.16%   1.82%   9.27%   10.50%
Accrued expenses   1,057,542    919,340    1,146,392    24.70%   8.40%   0.85%   0.96%
Minority interest   77,199    470,893    474,376    0.74%   514.48%   0.35%   0.40%
Total liabilities   101,668,649    113,820,004    119,541,824    5.03%   17.58%   88.22%   100.00%
SHAREHOLDERS' EQUITY                                   
Subscribed and paid in capital   425,914    464,495    480,869    3.53%   12.90%   0.35%     
Retained earnings   10,748,889    14,009,129    14,554,267    3.89%   35.40%   10.74%     
Appropiated   9,820,186    13,033,494    13,163,116    0.99%   34.04%   9.71%     
Unappropiated   928,703    975,635    1,391,151    42.59%   49.80%   1.03%     
Reappraisal of assets   829,433    895,980    935,174    4.37%   12.75%   0.69%     
Gross unrealized net gain on investments   -4,549    -10,869    -4,064    -62.61%   -10.66%   0.00%     
Total shareholder's equity   11,999,687    15,358,735    15,966,246    3.96%   33.06%   11.78%     

 

12
 

 

   
  3Q14

 

INCOME STATEMENT  As of   Growth               Growth 
(COP million)  Sep-13   Sep-14   Sep-14/Sep-13   3Q13   2Q14   3Q14   3Q14/2Q14   3Q14/3Q13 
Interest income and expenses                                        
Interest on loans   4,909,261    5,739,200    16.91%   1,661,695    1,908,098    1,972,374    3.37%   18.70%
Interest on investment securities   390,132    320,822    -17.77%   95,030    86,584    78,760    -9.04%   -17.12%
Overnight funds and interbank loans   17,930    31,214    74.09%   6,375    7,536    12,565    66.73%   97.10%
Financial leases   661,678    690,217    4.31%   216,028    227,878    234,908    3.08%   8.74%
Total interest income   5,979,001    6,781,453    13.42%   1,979,128    2,230,096    2,298,607    3.07%   16.14%
Interest expense                                        
Checking accounts   22,284    22,082    -0.91%   7,377    7,201    7,256    0.76%   -1.64%
Time deposits   973,405    1,053,737    8.25%   319,342    336,180    363,413    8.10%   13.80%
Savings deposits   500,533    364,796    -27.12%   151,586    115,424    123,147    6.69%   -18.76%
Total interest on deposits   1,496,222    1,440,615    -3.72%   478,305    458,805    493,816    7.63%   3.24%
Interbank borrowings   46,501    95,026    104.35%   22,887    30,930    28,835    -6.77%   25.99%
Borrowings from development and other domestic banks   164,756    182,059    10.50%   55,717    59,791    57,582    -3.69%   3.35%
Overnight funds   41,991    73,107    74.10%   9,965    12,018    41,211    242.91%   313.56%
Long-term debt   569,519    572,392    0.50%   192,054    188,518    193,504    2.64%   0.75%
Total interest expense   2,318,989    2,363,199    1.91%   758,928    750,062    814,948    8.65%   7.38%
Net interest income   3,660,012    4,418,254    20.72%   1,220,200    1,480,034    1,483,659    0.24%   21.59%
Provisions for loans and accrued interest losses and other receivables , net   (1,066,217)   (1,155,698)   8.39%   (326,879)   (389,500)   (429,151)   10.18%   31.29%
Recovery of charged-off loans   161,984    158,451    -2.18%   52,279    58,373    55,142    -5.54%   5.48%
Provision for foreclosed assets and other assets   (115,455)   (99,421)   -13.89%   (32,281)   (28,919)   (29,616)   2.41%   -8.26%
Recovery of provisions for foreclosed assets and other assets   62,007    69,716    12.43%   17,648    24,836    19,406    -21.86%   9.96%
Total net provisions   (957,681)   (1,026,952)   7.23%   (289,233)   (335,210)   (384,219)   14.62%   32.84%
Net interest income after provision for loans and accrued interest losses   2,702,331    3,391,302    25.50%   930,967    1,144,824    1,099,440    -3.96%   18.10%
Commissions from banking services   364,933    519,770    42.43%   123,366    170,788    183,259    7.30%   48.55%
Electronic services and ATM fees   57,945    74,349    28.31%   19,243    22,520    26,192    16.31%   36.11%
Branch network services   96,846    109,040    12.59%   34,696    35,552    38,506    8.31%   10.98%
Collections and payments fees   206,004    246,825    19.82%   71,232    83,501    87,449    4.73%   22.77%
Credit card merchant fees   5,598    8,935    59.61%   2,490    (373)   6,358    1804.56%   155.34%
Credit and debit card fees   505,328    583,150    15.40%   170,889    193,675    193,928    0.13%   13.48%
Checking fees   52,608    50,908    -3.23%   17,577    17,178    15,813    -7.95%   -10.04%
Trust activities   158,948    154,911    -2.54%   46,730    50,933    52,005    2.10%   11.29%
Brokerage fees   49,737    43,068    -13.41%   11,651    15,243    16,045    5.26%   37.71%
Check remittances   16,027    32,614    103.49%   5,618    12,753    11,029    -13.52%   96.32%
International wire transfers   45,668    61,658    35.01%   19,901    19,826    21,253    7.20%   6.79%
Fees and other service income   1,559,642    1,885,228    20.88%   523,393    621,597    651,837    4.86%   24.54%
Fees and other service expenses   (168,304)   (236,316)   40.41%   (62,853)   (79,918)   (86,926)   8.77%   38.30%
Total fees and income from services, net   1,391,338    1,648,912    18.51%   460,540    541,679    564,911    4.29%   22.66%
Other operating income                                        
Foreign exchange gain (loss), net   31,706    198,146    524.95%   25,989    38,027    127,374    234.96%   390.11%
Gains on forward contracts in foreign currency   19,707    (35,076)   -277.99%   23,802    4,400    (53,433)   -1314.39%   -324.49%
Gains on sales of investments in equity securities   (1,136)   (1,234)   8.63%   (3,205)   (183)   (475)   159.56%   -85.18%
Gains on sales of mortgage loans   25,835    14,447    -44.08%   5,703    4,542    4,800    5.68%   -15.83%
Dividend income   54,605    69,457    27.20%   7,303    18,428    5,149    -72.06%   -29.49%
Income from non-financial subsidiaries   107,288    113,591    5.87%   34,349    41,423    38,745    -6.47%   12.80%
Insurance income   -    7,268         -    8,703    7,255    -16.64%     
Communication, postage, rent and others   344,330    433,319    25.84%   123,231    144,625    149,887    3.64%   21.63%
Total other operating income   582,335    799,918    37.36%   217,172    259,965    279,302    7.44%   28.61%
Total income   4,676,004    5,840,132    24.90%   1,608,679    1,946,468    1,943,653    -0.14%   20.82%
Operating expenses                                        
Salaries and employee benefits   1,100,174    1,199,982    9.07%   370,876    398,487    397,268    -0.31%   7.12%
Bonus plan payments   137,820    143,422    4.06%   22,877    51,166    41,194    -19.49%   80.07%
Indemnities benefits   25,570    37,487    46.61%   9,250    12,908    13,029    0.94%   40.85%
Administrative and other expenses   1,668,163    1,768,392    6.01%   577,173    615,543    617,830    0.37%   7.04%
Insurance on deposits, net   101,354    104,214    2.82%   48,446    38,495    24,149    -37.27%   -50.15%
Donation expenses   9,980    10,916    9.38%   3,807    1,664    8,291    398.26%   117.78%
Depreciation   309,970    398,822    28.66%   111,073    132,734    138,707    4.50%   24.88%
Total operating expenses   3,353,031    3,663,235    9.25%   1,143,502    1,250,997    1,240,468    -0.84%   8.48%
Net operating income   1,322,973    2,176,897    64.55%   465,177    695,471    703,185    1.11%   51.17%
Goodwill amortization (1)   40,545    155,725    284.08%   12,745    50,831    51,519    1.35%   304.23%
Non-operating income (expense)                                        
Other income   133,843    129,720    -3.08%   48,712    47,302    43,445    -8.15%   -10.81%
Minority interest   (7,383)   1,342    118.18%   (4,901)   1,162    1,846    58.86%   137.67%
Other expense   (109,458)   (125,175)   14.36%   (48,498)   (44,655)   (31,655)   -29.11%   -34.73%
Previous periods (*)   -    (89,075)        -    -    (89,075)        0.00%
Total non-operating income   17,002    (83,188)   -589.28%   (4,687)   3,809    (75,439)   -2080.55%   1509.54%
Income before income taxes   1,299,430    1,937,984    49.14%   447,745    648,449    576,227    -11.14%   28.70%
Income tax expense   (273,043)   (546,833)   100.27%   (123,820)   (181,165)   (160,711)   -11.29%   29.79%
Net income   1,026,387    1,391,151    35.54%   323,925    467,284    415,516    -11.08%   28.28%

 

(*) Correction of non-material mistakes for the periods 2012 and 2013, for a total amount of COP 89.075 million, resulting from the double recording of certain securities provided as guarantee by the Bank´s proprietary trading desk. This operational risk was caused by a design flaw in a software created for the purpose of managing the Bank´s securities portfolio. The flaw was duly corrected by the Bank.

 

13
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

         
  BANCOLOMBIA S.A.
(Registrant)
 		  
Date:  November 10, 2014  By:   /s/  JAIME ALBERTO VELÁSQUEZ B.  
    Name:   Jaime Alberto Velásquez B.  
    Title:   Vice President of Strategy and Finance